PM Daily Market Commentary - 10/19/2016

davefairtex
By davefairtex on Thu, Oct 20, 2016 - 2:38am

Gold rose +6.70 to 1270.00 on  moderate volume, and silver rose +0.06 to 17.69 on moderately light volume.

Today. gold finally broke above both the 9 EMA and the 200 MA.  Not only that, gold also printed a swing low.  These three technical indications suggest that a near-term low is probably in.  It was even better that gold's rally came on a day that saw little change in the buck, which indicates that today's move higher was not simply a currency effect.

The December rate-rise projection rose to 64%, up 4%.

Gold open interest at COMEX rose +3,894 contracts.

Silver did not perform as well as gold; it rose above the 9 EMA briefly, but was unable to close above it.  Silver did manage to close above its downtrend line, which is a positive sign.  While the gold/silver ratio topped out three weeks ago, the ratio is only sinking very slowly, and in fact it actually rose today, which is somewhat bearish.

The miners jumped higher today, following through on yesterday's break above consolidation, with GDX up +2.77% on moderate volume, and GDXJ rose +3.52% on moderately heavy volume.  Miners are back to outperforming metal for the second day in a row, which is a bullish sign.  GDX is approaching a first resistance level at (roughly) 25, which is a previous low

Platinum fell -0.17%, palladium moved down -0.61%, and copper rose +0.17%, printing a new low.

USD sold off today, but managed to rally back again, closing up +0.05 to 97.90.  The buck remains in an uptrend.

Crude rose +0.65 to 51.51, breaking higher following a bullish petroleum status report which showed a surprise bullish inventory draw of -5.2 million barrels on the week.  Immediately after the report was released, crude rallied strongly higher, hitting a peak of 52.22.  It could not hang on to its gains, however, and sold off into the close.  Still, today's candle print was an "opening white marubozu" which is still fairly bullish, and the new high suggests we may well have higher oil prices in the near future.

SPX rose +4.69 to 2144.29.  This small gain was enough to push SPX back above its 9 EMA.  Energy led (XLE:+1.42%), while consumer staples (XLP:-0.57%) trailed - a fairly wide disparity between the two groups.   VIX fell -0.87 to 14.41.

TLT rose +0.08%; no change for bonds today.  They remain in a downtrend, but have found support at the 200 MA.

JNK rose +0.33%, moving up to within about ten cents of the all time high.  JNK remains in a strong uptrend.

CRB rose +0.52%; CRB is slowly moving back into a longer term uptrend.

Miners are leading PM higher; the follow-through from yesterday's breakout looks relatively strong.  The miners are approaching resistance; if they can plow through 25, that will be a good sign.  So far gold's liftoff looks relatively sedate; volume remains low, and there does not seem to be much excitement.  The one fly in the ointment is silver, which is lagging fairly severely.  That seems like a warning sign to me.  I wouldn't go all in on this move unless silver starts to behave a little better.  In a real rebound, silver should be leading, not following.

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1 Comment

raiderlance's picture
raiderlance
Status: Member (Offline)
Joined: Oct 18 2016
Posts: 1
Thank you.

thank you Mr. David Fairtex for your daily market insights.  I find the charts and info very helpful.

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